In this week’s newsletter I go down the rabbit hole into the theme of accelerators in emerging markets based on my conversation with Sebastian Vidal.
Let’s go through a series of Essential BIG Questions together so we can collectively understand: The Recipe for Accelerators in Emerging Markets.
”Start-Up Chile attracted entrepreneurial talent from all over the world. All with the aim of, on one hand, generating that break in the mentality of the local entrepreneur and, on the other, placing Chile on the peak of the innovation and global entrepreneurship map.” 1
Sebastian was very clear with me that Startup Chile was intentional and built with a main goal and purpose: To change the nation’s culture towards entrepreneurship and to position Chile as the hub of innovation for Latin America!
The Chilean government knew that their entrepreneurs needed support and they understood that their country was too reliant on the natural resources industry. They identified a clear problem and formulated a solution in the form of Startup Chile.
According to the World Bank Chile has been one of the Latin America’s fastest growing economies. Like most countries it suffered immensely during the pandemic.
Suggested Reading: The World Bank Chile Country Report
Excerpt: “Despite tremendous economic progress and poverty reduction over the last few decades, the existing policy framework has been insufficient to continue fostering productivity growth and economic diversification, improve labor market outcomes, and further address deep-rooted inequality.”
🌱 Essential BIG Question: What is Chile’s ‘resource rich’ economic story?
👇Have a Glance (i) 👇
Source: Visual Capitalist
It should be noted that Startup Chile was a response to their local environment and used globalised solutions. This local-glocal model is something that Sebastian explained on the podcast. It is a strategy of innovation and global entrepreneurship which he says had a local focus but with a global outlook.
Startup Chile was launched in 2010 and here are a few milestones from its impact report.
🏴 It was the first program of its kind in the world.
🏴 It has been replicated by many countries around the globe.
🏴 It has received 1600+ applications since its inception.
🏴 Startups have collectively raised over $997M in funding.
👇Have a Glance (ii) 👇
Source: Startup Chile Impact Report
🌱 Essential BIG Question: So how do we replicate it?
The idea isn’t to replicate but to learn from the successes’ of the Chilean programme and see how it can be applied elsewhere. This is what Sebastian explained to me in our conversation and precisely what he did when he was invited to Puerto Rico. What is different about Startup Chile is that it never tried to emulate Silicon Valley, Israel or elsewhere. As a starting point, it was aiming to satisfy a local need with one goal in mind: impact.
The Puerto Rico Recipe
Parallel 18 is an initiative created by the Puerto Rico Science & Innovation Trust, a private non for profit organisation. Its mission is, “By 2022, Puerto Rico will be a center of global recognition that develops and retains scientists, companies and entrepreneurs of world excellence, to boost our competitiveness and creativity.”
The Puerto Rico Science & Innovation Trust states on its website:
Researchers are our lifeblood.
Entrepreneurs are our change-makers.
Investors & Enterprises are our catalysts
Parallel18 describes itself as a global accelerator program that offers Puerto Rican and international entrepreneurs access to high-quality business training, mentors, business contacts, and investors to help startups scale from Puerto Rico. It provides equity free funding, office space, and support in an effort to jump-start the island as an innovation hub.
🌱 Essential BIG Question: What about impact?
In the below episode of Crossing Borders below you will hear Sebastian speak about the impact both Startup Chile and Parallel 18 are having in their respective ecosystems.
👇Have a Watch (i) 👇
Source: Crossing Borders
Puerto Rico has tailored the Startup Chile model to suit their ecosystem by:
🏴Building a tech community
🏴Retaining local talent
🏴Repatriation of talent
🏴Creation of a Knowledge Based Economy
By identifying their key problems they were able to build a robust programme which is having impact both locally and globally (glocal model).
Must Read: Startup Chile a Critical Analysis
Excerpt: “The efforts of Start-Up Chile in many ways highlight both the way that government initiatives can be helpful in spurring entrepreneurship; as well as the need for public policy to address all elements of the entrepreneurship ecosystem in order to have maximum impact. While Start-Up Chile can perhaps be tweaked around the edges, it will be important for Chile to identify, and deal with, the binding constraints at the microeconomic level to assure that the efforts of Start-Up Chile are allowed to bear fruit.”
🌱 Essential BIG Question: Which countries have devised their own recipe?
IncuBAte (Argentina) Peru (Startup Peru) Mexico(Startup Mexico), Ruta N (Colombia), Start-Up Brazil, MaGIC (Malaysia), Start Up Jamaica and K-Startup Grand Challenge (South Korea) amongst others have all studied the Startup Chile model and devised their own recipe.
🌱 Essential BIG Question: Where do the Startup Chile startups originate?
👇Have a Glance (iii) 👇
Source: Startup Chile Impact Report
One of the most memorable insights I came across whilst studying the Startup Chile model was research that supported the idea that when foreign and local entrepreneurs interact business skills are enhanced. The implication being that behaviours change as a result. As many countries in emerging markets overcome the challenge of building an entrepreneurial culture (and mindset) simple efforts to encourage collaboration, if even at a superficial level can catalyse innovation. As we move away from silos we should also be encouraged to interact with others across the globe who are building startups.